Resort Balks at Energy Hub Plan

ROSARITO BEACH, Mexico — A proposal to turn this tourist resort just south of the U.S. border into a major energy hub has unleashed a fury of resentment among local leaders.

They are waging a fierce fight against a sophisticated corporate public relations campaign in favor of a liquid natural gas terminal.

Just last Tuesday, a dozen global energy company executives in dark suits filed into a banquet room at the Rosarito Beach Hotel to pitch their plan to build a $460-million gas plant in the heart of town.

The plant, they told an equal number of casually dressed Rosarito civic leaders, would generate 1,400 jobs and pump $15 million a year into the local economy. The townspeople were assured that the chances of a catastrophic accident at the gas plant would be less than that of dying from a bee sting.

The group listened patiently, and then let the visiting corporate executives have it. One of the first to confront them was furniture store owner Eduardo Orosco, who was one of many who didn't buy the pitch.

"Don't B.S. me," Orosco grumbled, standing nose to nose with one of the men in suits. "What makes you think terrorists won't target your plant to get back at America?"

Responded Rob Bryngelson of El Paso Global LNG: "Say, I'd like to talk to you more about that. Call me sometime.... What's most important to us is making everyone feel comfortable."

"Yeah, right," Orosco replied.

So ended the most recent attempt over the last eight months by a partnership of El Paso Global LNG and Phillips Petroleum Co. to forge a working partnership with leaders of the town of 100,000 best known for its seaside hotels, restaurants, watering holes and rowdy spring-break revelers.

Now, proponents and detractors are gathering their forces for bigger battles ahead over what would be the only facility of its kind on the Pacific Coast, and the largest private investment ever in Rosarito Beach.

But Rosarito is just one of several Mexican and American coastal communities targeted for such facilities, which receive natural gas via pipeline from ships, to be burned at power plants that produce electricity.

In fact, liquid natural gas is among the most efficient, abundant and cleanest-burning fuels in the energy business. It is also among the safest.

North of the international line, Occidental Petroleum had hoped to build a $250-million natural gas terminal next to the Ormond Beach power plant in Oxnard. But that land was purchased last week for a nature preserve.

Along the coast of Baja California north of Ensenada, at least four energy plant proposals remain in play.

The campaign over the Rosarito Beach proposal has been particularly contentious.

Galvanized by what they view as a threat to the rhythms of life in the town that incorporated in 1995, local leaders have organized street demonstrations and launched letter-writing campaigns to Mexican federal authorities, including President Vicente Fox.

The energy firms have taken out full-page ads in Rosarito Beach newspapers, conducted surveys and passed out brochures during an intensive door-to-door campaign, extolling the project's benefits.

In March, the firms sent 20 local business and political leaders on an all-expenses-paid tour of a model natural gas plant in Baltimore.

Hugo Torres, owner of the landmark Rosarito Beach Hotel, is among those who worry that the project is not safe and is all but certain to destroy the beach town's charms.

"They want a back door to the California market," Torres said, although corporate officials say most of the electricity would be consumed locally. "But we don't consider ourselves energy producers; we are a tourist center."

"Who will win?" he asked. "I can't say. But we are at a critical juncture in this fight."

Rosarito Beach Mayor Luis Enrique Diaz was unavailable for comment. But his spokesman, Macario Gonzales, said the mayor has said that if a majority of residents wants it, he will recommend issuance of a permit. If not, he won't.

The final decision will be made by the Rosarito Beach City Council.

The Rosarito location is favored for its proximity to several natural-gas-fed power plants under construction or on the drawing boards south of the border.

Some of the gas, however, would be piped to energy-hungry Southern California.

Billions of Dollars in Revenues at Stake

Potentially at stake are billions of dollars in revenues.

By 2010, Baja California's demand for natural gas is projected to grow more than five times from what it is today, from 150 million cubic feet per day to 800 million cubic feet per day, Mexican energy authorities say.

Without new sources of the clean-burning fuel to meet the demand, the growth of the region's economy is threatened, the energy companies say.

By most accounts, however, power plants in Baja will need only one natural gas facility to meet their needs.